Hammerson’s Positive Plan For Birmingham

Hammerson, owner of Bullring & Grand Central and the planned Martineau Galleries, has announced a proposed rights issue combined with sale of VIA Outlets delivering £825m gross proceeds to recapitalise and further reposition the business.

Prior to Covid-19, Hammerson was delivering against its strategy of reducing debt, progressing disposals, and making significant steps to shift the brand mix to better reflect customer demand. Covid-19 has had an adverse impact on the Group’s operational and financial performance.

With Hammerson’s strategic and financial flexibility, it plans to support the delivery of a more focused portfolio of flagship destinations including Bullring & Grand Central and its City Quarters development opportunities, which includes Martineau Galleries in Birmingham.

Hammerson plan to introduce a new leasing approach, based on experiences with brands. This new approach will include more flexible leases, rebased rents at more affordable levels, indexation replacing the existing rent-review system and an omnichannel top-up element.

David Atkins, Chief Executive of Hammerson, said:

“We have announced a series of transactions to recapitalise the business and reduce leverage by a quarter. This will help us to deal with these unprecedented conditions while enabling us to reposition Hammerson further. Looking forward, we will continue to dispose of assets and recycle capital from across the portfolio as we create a business focused on flagship destinations and mixed-use City Quarters over the medium term.

“The extraordinary disruption caused by Covid-19 on the retail property sector, the economy and society as a whole is reflected in these half year results, however, in recent weeks we have seen an encouraging increase in footfall as confidence begins to return amongst visitors to our flagship destinations.

“The pandemic has exacerbated structural shifts in retail, exerting further pressure on both property owners and brands, and provided further evidence that the UK’s historic leasing model has served its time. It is outdated, inflexible and needs to change.  We are introducing a new UK leasing approach – one that is simpler, reflects an omnichannel retail environment and rewards positive performance on both sides.”